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Uttar Pradesh Power Distribution Network Rehabilitation Project Is a Sector Project Consisting of About 35 Subprojects

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Uttar Pradesh Power Distribution Network Rehabilitation Project Is a Sector Project Consisting of About 35 Subprojects Attachment Project Description The Uttar Pradesh Power Distribution Network Rehabilitation Project is a sector project consisting of about 35 subprojects. It is proposed to be financed through multitranche financing facility (MFF) with time slice approach. All 35 subprojects will commence under tranche 1 and will continue under tranche 2. Out of the 35 subprojects, 26 will be financed by ADB and 9 by the Uttar Pradesh Power Corporation Limited (UPPCL). ADB will finance 13 subprojects to deliver output 1 (conversion of rural low-voltage network to aerial bundle conductors), and 13 subprojects for output 2 (separation of 11 kilovolt (kV) rural feeders supplying private tube wells for agriculture and residential consumers). The nine subprojects to be financed by UPPCL will support output 1. The design and monitoring framework (DMF) for this tranche is in Annex 1. Cost Estimates and The total cost of the subprojects to be financed under tranche 1 is Financing Plan estimated at $624.0 million inclusive of taxes, duties, interest, and other charges on the loan during construction. The detailed cost estimates and financing plan are in Annex 2. Item ADB OCR Counterpart Total Loan Funds Rural electricity distribution 125.6 215.1 340.7 network improved . Systems for separating 166.9 166.9 electricity distribution network supplying agriculture consumers from residential consumers established Project Management 7.4 0.3 7.7 Contingencies 0.0 99.9 99.9 Financial Charges 0.0 8.6 8.6 Total 300.0 324.0 624.0 Source: Asian Development Bank Loan Amount and The request is for a regular loan of $300 million from the ordinary capital Terms resources of Asian Development Bank (ADB) provided under ADB’s London interbank offered rate (LIBOR)-based lending facility, with a 20 year term including a grace period of 5 years, an interest rate determined in accordance with ADB’s LIBOR-based lending facility and such other terms and conditions as agreed in the framework financing agreement (FFA), and further supplemented under the Loan and Project Agreements. Based on straight line repayment method, the average loan matuarity is 12.75 years and the matuarity based premium is nil. Expected Project The subprojects financed under tranche 1 are expected to be 2 Completion and completed by 31 December 2025. Closing date of the loan account will Closing Dates be 30 June 2026. Advance Contracting Advance contracting is requested for works, goods and services, and consultant recruitment, as per the provision of the framework financing agreement. Retroactive Financing Retroactive financing is requested for the eligible expenditures, not exceeding 20% of the loan amount, incurred before loan effectiveness, but not earlier than 12 months before the signing of the legal agreement. Implementation The executing agency will be the Uttar Pradesh Power Corporation Arrangements Limited (UPPCL). The following four subsidiaries of UPPCL are the implementing agencies. a. Dakshinanchal Vidyut Vitran Nigam Limited, Agra (DVVNL) b. Madhyanchal Vidyut Vitran Nigam Limited, Lucknow (MVVNL) c. Paschimanchal Vidyut Vitran Nigam Limited, Meerut (PVVNL) d. Purvanchal Vidyut Vitran Nigam Limited, Varanasi (PUVVNL) Detailed implementation arrangements are described in the facility administration manual (FAM). Procurement and The procurement plan is in Annex 3. Terms of reference (TOR) for the Consulting Services engagement of advisors under this tranche is included in FAM. Confirmation of India confirms that the understandings set out in the FFA have been Continuing Validity of adhered and remain true to date. and Adherence to Provisions of FFA, Previous Agreements, and the Design and Monitoring Framework Readiness of the The preliminary designs, economic and financial assessment, bid Project for documents for works contracts and request for proposals (RFP) for Implementation project management consultants to be financed under tranche 1 have been completed. The technical and financial bid evaluation of all 26 works contracts and technical and financial proposal evaluation of all 5 consulting contracts for project management have been completed. The investments to be financed using counterpart funds have been awarded and work is in progress. Safeguards The safeguard assessment and review framework (SARF) for the MFF project, initial environmental examination, and resettlement plan based on sample activities under subprojects have been prepared and included as Annex 4. 3 Annex 1 DESIGN AND MONITORING FRAMEWORK FOR TRANCHE 1 Impact the Project is Aligned with Quality and financial cost recovery in the power supply in Uttar Pradesh improved (24X7 Power for All) a Performance Indicators with Data Sources and Results Chain Targets and Baselines Reporting Mechanisms Risks Outcome By 2026: Efficiency, a. UPPCL’s ATC losses reduced a. Uttar Pradesh Fiscal constraints reliability, and to 25% Electricity Regulatory might prevent the sustainability of (2019 baseline: 36.8%) (OPs 6.2, Commission annual Uttar Pradesh power supply in 6.2.1) report government’s b. UPPCL group’s financial losses timely payment of selected rural b. UPPCL’s annual on consolidated basis reduced to subsidy, and areas improved financial statements ₹12 billion (2019 baseline : introduction of Financial losses of ₹70.7 billion on direct cash consolidated basis) (OP 6.1) transfers to subsidize poor households’ lifeline consumption, adversely affecting UPPCL’s financial position. Outputs By 2025: 1. Rural 1a. 40,000 km of low voltage COVID-19–related electricity network in 30,000 rural habitations restrictions on 1a. Project progress distribution inhabited by 40 million people construction reports submitted by network including 10 million people living activities cause UPPCL and ADB review improved below the poverty line converted to implementation missions. ABC (2019 baseline: 0 km of ABC delays. in identified habitations) (OPs 1.3.1, 3.1.3, 3.2, 5.1.1)b 1b. At least 25% of adults in 1b. Sample surveys to be selected districts, of whom 50% undertaken before and are women demonstrated after the intervention improved knowledge on safe and efficient use of electricity. (2019 baseline: 0%)c 2. Systems for By 2025: separating 2a. 400 11 KV feeders supplying 2a-b. Project progress electricity electricity to 100,000 farmers reports submitted by distribution for separated from feeders supplying UPPCL and ADB review agriculture residential consumersd missions consumer from (2019 baseline: 0) residential (OPs 1.3.1, 3.1.3) consumers established 2b. 400 new 11 kV feeders commissioned for exclusive electricity supply to 1.0 million 4 Performance Indicators with Data Sources and Results Chain Targets and Baselines Reporting Mechanisms Risks rural households (6 million people) d (2019 baseline :0) (OPs 2.4.1, 3.1.3, 3.2, 3.2.5, 5.1, 5.1.1) 3. Systems for By December 2022: bill collection in 3a. At least 1,000 individuals Conservative rural areas and (including at least 500 women 3a. Pre- and post-training social attitudes financial reported improved knowledge on evaluation and traditions management new bill collection methods discourage female c improved, and (2019 baseline: 0) participation as gender-sensitive collection agents workplace 3b. At least 1,000 individuals created (including 500 women) from 500 3b-3e. TA progress village entities employed as billing reports prepared by the and collection agents (2019 TA consultants and TA c baseline: 0) (OPs 1.2, 2.1) completion report to be completed in 2023. 3c. 4 new bill collection strategies with mechanisms for engaging village entities developed and pilot tested in at least 1,000 rural habitations. (2019 baseline: 0)c 3d. FMAP consisting of 8 actions including provisioning policy for unrecoverable receivables implemented (2019 baseline: not available) (OP 6.2.3) c 3e. 2 sets of gender-responsive human resource practices developed for UPPCL and its contractors. (2019 baseline: none) ( OP 2.3.2)c Key Activities with Milestones 1. Rural electricity distribution network improved 1.1 Undertake detailed survey and quantity estimates by Contractor (Q1 2021–Q3 2021) 1.2 Conversion of low voltage network to ABCs (Q2 2021–Q2 2025) 1.3 Implement of awareness building on safe and efficient electricity usage (Q1 2021–Q4 2021). 2. Systems for separating distribution network supplying agriculture from residential consumers established 2.1 Undertake detailed survey and quantity estimates by contractor (Q1 2021–Q4 2021) 2.2 Construction 11 kV feeders to supply residential villages (Q2 2021–Q4 2025) 2.3 Verify and accept the 11 kV feeders (Q3 2022–Q4 2028) 3. Systems for bill collection in rural areas and financial management improved, and gender- sensitive workplace created 3.2 Design new bill collection strategies involving rural women (Q1 2021–Q1 2021) 3.3 Pilot test four new bill collection strategies using WSHGs (Q2 2021–Q2 2022) 3.3 Prepare and implement receivables write-off policy (Q1 2021–Q4 2022) 5 3.4 Develop interventions for gender inclusivity of contractual workers (Q1 2021–Q3 2021) 3.5 Conduct an institutional assessment of human resources policies and practices on gender inclusivity (Q1 2021–Q2 2021) 3.6 Design and implement gender-responsive employment practices. (Q1 2021–Q4 2022) Project Management Activities Procurement plan activities (Q1 2019–Q3 2020) Consultant selection procedure (Q2 2019–Q3 2020) Gender action plan key actions (Q1 2021–Q4 2022) Semiannual review missions (Q4 2020–Q2 2025) Approval of periodic financing request for tranche 2 (Q4 2023) Inputs ADB (regular ordinary capital resources loan) $300 million ADB Trust Fund (technical assistance) $ 2 million UPPCL and Government of Uttar Pradesh $324 million Assumptions for Partner Financing Not applicable ABC = aerial bundle conductor, ADB = Asian Development Bank, ATC = aggregate technical and commercial, FMAP = financial management action plan, km = kilometer, kV = kilovolt, OP = operational priority, Q = quarter, TA = technical assistance, UPPCL = Uttar Pradesh Power Corporation Limited, WSHG = women’s self-help group. a Government of India and Government of Uttar Pradesh. 2017. 24X7 Power for All. India. b ABC systems have design features to withstand climate and disaster risks.
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